- The Washington Times - Thursday, October 31, 2002

The sputtering economy is a growing concern to voters, but it is not expected to be a decisive factor in Tuesday's elections, in part because unemployment has stayed at historically low levels below 6 percent, top pollsters said yesterday.
"People define recession as high unemployment," said Robert M. Teeter, a Republican pollster and president of Coldwater Corp., a business research firm. Polls show "people are not worried about losing their jobs" after last year's mild recession the way they were after earlier, more severe downturns.
Mr. Teeter and Peter Hart, a Democratic pollster who also spoke before the National Economic Club yesterday, expect Tuesday's congressional elections to largely maintain the status quo in the House and Senate as concerns about the economy and other issues have not created enough voter "anger" to produce a political sea change.
Unemployment has risen significantly since hitting a 40-year low of 3.9 percent two years ago, but it remains at levels that in earlier decades were considered the hallmark of a healthy economy.
A gauge of economic well-being used by economists to predict elections, called the "misery index" because it adds the unemployment rate to the inflation rate, is up only moderately from the 34-year low near 8 percent it fell to in 1998.
One economic factor that is performing far worse than previous years is the stock market, which is set to end down significantly in 2002 for a third year in a row something that hasn't happened since the Great Depression.
But while the stock slump has seriously threatened people's retirement savings, Mr. Teeter said he sees little evidence it is affecting people's votes.
Economic concerns also are sharing center stage with an equally important issue this year, he said: the war on terrorism. And whatever economic pain people feel is not being blamed primarily on President Bush or other incumbents, he said.
Polls show people believe the greatest reasons for the poor economy is the shock and aftereffects of the September 11 terrorist attacks, followed by the business cycle. Only 12 percent blame Mr. Bush's policies, he said, the same number that finger former President Bill Clinton.
Mr. Hart said his surveys detect a big drop in satisfaction with the economy since January 2001, from 75 percent to 31 percent. But he agreed that has not become a decisive factor in the elections.
Nearly half of voters think the economy is the most important problem facing the country, he said, but people are not angry or worried enough to vote incumbents out of office.
Among the voters who are most nervous about the economy, by a margin of two to one favor Democrats, he said. But among the 39 percent of voters who think terrorism and the war with Iraq are the most important issues, by a margin of two to one favor Republicans, he said.
Both pollsters said that if the economy continues to stagnate and not generate jobs, and the stock market stays depressed, it will become a much bigger factor in the 2004 presidential and congressional elections.
Economic conditions such as rising unemployment "take time to affect people," said Mr. Teeter. "People get more worried the longer it goes on."
"If the economy looks like it does now, it will be a huge issue in 2004," said Mr. Hart. But, he added, "two years is an eternity."
Most of Wall Street's political analysts also predict that the distressed stock market and economy will not cause enough voter dissatisfaction to significantly change the status quo in Congress.
But one dissenter yesterday said he believes the Democrats have a much greater chance of taking control of the House than is widely believed, because of a backlash against Mr. Bush's proposal to let young people put part of their Social Security funds in the stock market.
Gregory Fossedal, chief investment officer of the Democratic Century Fund, said Democrats have ably exploited the fears generated by shrinking retirement portfolios. Those fears came forcefully to the surface this month when voters received 401(k) retirement account statements showing deep losses in stock funds in the summer quarter.
"Voters don't like declines of 70 percent in the stock market, as we've seen on the Nasdaq [Composite Index] since 2000," he said. "All this gives an edge to the Democrats."
Candidates in particularly close races for the House and Senate are especially in danger of losing because of the Social Security issue, he said.
"A House Republican in a 50-50 seat told me three weeks ago, 'Social Security might tip my race and five or six others,'" he said.

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